As a tour guide, I would often get questions like: “How much is a house in Croatia? or “Do you have property taxes?”. However, the most common question is: “Can foreigners (including US citizens) own property in Croatia?” As I was doing research, some findings surprised and even shocked me.
- Citizens of the EU and Switzerland can buy property under same conditions as Croatian citizens, except for agricultural land, which is covered by special regulations. UK citizens have the same rights as the EU citizens until the end of 2020.
- Non-EU citizens can own property in Croatia if there is a reciprocity agreement between their country (or a US state) and the Republic of Croatia.
- Keep in mind that, for some reason, Croatian authorities appear to turn the blind eye on, or even more or less tacitly encourage, taking advantage of legal loopholes.
Although I have no intention to provide legal or real estate advice, take this post simply as an opportunity to unravel Croatia.
Who Buys Real Estate In Croatia?
Every fifth real estate in Croatia is bought by a foreigner. And while prices may be too high for an average Croat, they are obviously not too high for foreigners. In 2019, properties in Vir, Poreč and Vodice were the most attractive to foreign buyers.
In 2019, the property by the sea was predominately sold to Germans and Swiss, but Slovenians still have the most real estate in Croatia. They are followed by Germans, Austrians, citizens of Bosnia And Herzegovina and finally Italians and Slovaks.
The island of Vir has been super popular among foreigners for years, as the latest figures show. In the first four months of 2020, many as 60 building permits were issued for the island, and there are currently 159 open construction sites on the island.
Many, if not most of these houses were built without a permit and eventually “legalised”.
BTW, the island of Vir has been known for illegal construction, but from year to year it breaks tourist attendance records. Even during the COVID-19 pandemic, the island of Vir boasted good tourist numbers.
US Citizens And Real Estate In Croatia
U.S. citizens may, under condition of reciprocity, acquire real property in Croatia either by inheritance or by other legal transactions such as purchases, deeds, trusts, etc. Reciprocity is presumed to exist unless proof to the contrary becomes evident.
According to the data accessed in November 2020, the reciprocity exists for the following US states:
Alabama, Arizona, Alaska, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas,Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming;
For the following states, permanent residence is required: Arkansas, Hawaii, Kentucky, Minnesota, Mississippi, New Hampshire, Oklahoma and Vermont.
Administrative Procedure
The granting of approval for the acquisition of property rights for foreign nationals (excluding citizens and legal entities from the EU Member States) on real estate in the Republic of Croatia is decided upon in the administrative procedure at the direct request of the acquirer.
The procedure is conducted in accordance with the provisions of the Property and Other Real Rights Act as well as the General Administrative Procedure Act.
The application (written) is submitted in person at the Ministry of Justice or sent by mail to:
Ministarstvo pravosuđa Republike Hrvatske
Uprava za građansko, trgovačko i upravno pravo
Ulica grada Vukovara 49, 10000 Zagreb
The application must have the following attached:
- Legal basis for acquisition of ownership (sales/purchase contract, gift contract, maintenance contract, etc.) original or certified copy;
- Proof of ownership of the seller/estate agent of the real estate concerned, ie land register extract, an original or a certified copy, not older than six months;
- The statement of the administrative body responsible for urban planning and spatial planning of the community in which the real estate is located regarding the legal status of the real estate (whether the real estate is within the boundaries of the construction area as envisaged in the urban plan);
- Proof of citizenship of the acquirer (certified copy of the passport and the like) or proof of the legal status of the legal person (extract from the court register), if the acquirer is a legal person;
- In cases when the applicant is represented by a legal representative, it is necessary to submit a power of attorney in the original or a certified copy;
- If the applicant did not designate a representative who will represent him and is abroad, he/she is obliged to designate an individual with residence in Croatia who will be authorised to receive mail on his/her behalf;
- Proof of payment of the administrative fee in the amount of 35.00 kunas (5 euros) according to Tar. no. 88, Item 1 of the Decree on Tariffs of Administrative Fees.
“Loopholes”
Before even deciding to buy property in Croatia, get a lawyer! Try to find an experienced one, otherwise you’re doomed!
GET A LAWYER! ASAP!
Sir Geoffrey Bentwood QC, logo for the Queen’s Counsel cartoon strip
By Alexander Williams – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=22087516
Why do you so desperately need a lawyer? The following text, based on an interview with a mayor of a Croatian city, will make the picture more clear.
The mayor of Rovinj, Marko Paliaga, told a Croatian newspaper, Glas Istre that he had decided to put an end to illegal construction and to investors who do not respect spatial plans and dare to build without permits without any problems.
He said that all Istrian towns and municipalities signed a declaration asking the competent Ministry of Construction and the State Inspectorate to change certain laws to allow local governments to control illegal construction outside the construction area.
A home concrete mixer is a common sight in Croatia.
Not only many Croatians built their own homes DIY, but a huge percentage did it illegally (about 1 million houses were built without a permit.)
He says that they sent a lot of pictures of illegal construction to the chief state inspector, but there was no reaction, and problems are accumulating.
“I am worried because there has been a lot of talk about the second wave of legalization. Probably this is why incredible situations occur in which tents, awnings and large umbrellas are now placed on agricultural land, in order to provide shade and create the illusion of an already built facility.
We, by the way, record it with a drone and we can’t understand how this is possible. Agricultural landowners do this consciously, intentionally, for the sake of orthophoto shooting.” (BTW, there are special aeroplanes that take pictures of houses from above which, in turn, serve as basis for governmental legal activities).
Until 2023 foreigners will not be able to own agricultural property in Croatia.
However, if foreigners establishes a firm in Croatia, even a fake one, they can already own such real estate.
“Illegal builders”, he says, “are mostly foreigners“.
“It hurts me especially that they are Slovenes, Italians and Austrians. They are the most aggressive, arrogant and do not respect our space. I am the only minority mayor in Croatia, I am Slovenian. And that is why I can legitimately say that I am extremely disappointed in Slovenian politics and actions regarding the issue of illegal construction in Istria.”
“I am disappointed in their relationship with us. We are almost fellow citizens, and then they, the Slovenes, behave so irresponsibly and ruthlessly towards our territory! Our Istria is not only ours, but also theirs, Slovenian, all the way to the border with Trieste.
Instead of being together, protecting nature’s resources in a coordinated way, they disobey the rules and destroy it. I can’t figure it out and I don’t want to accept it. Both we here and the Slovenes are Istrians together. We should be careful how we treat the earth as our greatest wealth.”
I think that the Slovenes are doing great damage to Istria at this moment! They showed it on Crveni vrh near Umag, then in Duga uvala, Barbariga… I invite Croatian citizens to visit Barbariga and see how much foreigners are ready to destroy our territory.
June 2018 was the deadline for the cheap and almost condition-free legalisation of illegal buildings.
However, you can STILL keep legalising your house in Croatia under certain conditions.
We struggle, we work according to procedures, we bring all kinds of plans, we bring various studies about the use of space, we conduct public debates and then a Slovenian comes, illegally builds a cottage where he shouldn’t and – gets away with it!.
Here the territory is exploited in an extremely unacceptable way: it is permanently destroyed through the construction of a house or villa with swimming pools in the middle of agricultural land.
Small houses in the countryside are turned into houses with apartments for rent.
It happens every day, literally every day! In the first wave, someone legalized a 50-square-meter facility, and now they’re upgrading it to a 150-square-meter-facility!
Under the guise of reconstruction, tourist facilities are being upgraded. If we do not stop this phenomenon, it will take away the competitive advantage and attractiveness of Rovinj in the long run. Traffic in private and hotel accommodation will be lost, space will be illegally rebuilt, infrastructure will be overloaded and we will no longer have what adorns us and what is our advantage. And that is the preservation of space. This is our wealth” – he concludes and adds that in Slovenia they would end up in prison for what they do here, and that ‘arrogance has no end’ here because they are not effectively punished.
What’s going on? Why do these individuals get away with it? In this article I tried to give an answer.